One of the biggest mistakes building material companies make is not being focused enough. By focused I mean being focused on a type of customer or building or a geography, or focused on gaining new customers versus growing sales through current customers.
Casting Too Wide a Net
One of the reasons companies lack focus is that they’re selling a product that could potentially be used in many buildings.
Window, door and roof companies are a good example. They figure that since every building has windows, doors and a roof, they should treat every building as a prospect for their products. Instead of focusing, they cast as wide a net as they possibly can.
When you lose focus this way, you’re more likely to turn your product into a commodity. When you sell yourself as the right door for any building, you’re not positioning your product as the preferred solution. Instead, it will be just one of several viable alternatives, which will make price a much more important factor.
This is an extreme example and most companies aren’t this bad, but it’s an easy trap to fall into and many still aren’t focused enough.
Blinded by Opportunity
Another way building material companies lose focus is by chasing the next bright and shiny object. Multifamily is one opportunity that many building material companies want to go after, not necessarily because their product would be a great fit for multifamily construction, but because it’s a big and growing opportunity.
Well, where’s the harm in that? There’s an opportunity, so why not take a gamble and see whether it pays off? The reason to be cautious is that every opportunity you pursue comes with some costs. There are three big consequences to pursuing new opportunities.
The first consequence is that your current business will suffer as you shift your sales and marketing attention away from the customers who provide the bulk of your income. They should be your most profitable customers but the less attention you pay to them, the less business they will give you.
The second consequence is that the effectiveness of your sales and marketing efforts will decline. Your cost per sale will increase because you’re entering a new market or selling to a new kind of customer. It will take some time and a lot of trial and error before you can figure out how to effectively and efficiently acquire new customers.
Another consequence is that companies pursue new opportunities when they still have plenty of opportunities available to them in their current areas of focus.
Some companies that have been focused on selling to homebuilders decide to enter the remodeling market even though they still have a lot of opportunity to grow with homebuilders.
It takes time to convert a homebuilder – sometimes even years. But when these manufacturers decide they want to dip into the remodeling market, it’s like they’ve started climbing the homebuilder sales mountain and then decide to start climbing the remodeling mountain when they’re not even halfway to the top of the homebuilder mountain. They don’t add salespeople or marketing dollars – they assume they can climb both mountains at the same time with the same resources.
Manufacturers who are focused on homebuilders, on the other hand, are getting better and better at selling to them. Their marketing people are also improving their efforts. You are now on the radar for more builders and they are more likely to consider you when they are ready to make a change.
When you shift your focus away from homebuilders, you lose that momentum and squander a lot of the investments you made in carving out your place in that market.
I’m not saying you shouldn’t pursue new markets. What I’m saying is that you should ask yourself whether you’ve really hit the point of diminishing returns with your current markets or whether you’re just going after something big and shiny.
I also see companies who are doing well in the commercial market decide to enter the residential market, or vice versa. This almost always fails because these are two entirely different businesses and selling to them requires different skills, approaches, and strategies. If you try to sell to both, you quickly discover that it’s like architects are from Mars and homebuilder are from Venus.
Focus By Asking the Right Questions
To grow your sales more profitably with focus, start by clearly defining what you’re doing and trying to do.
Your first step is to ask yourself these four questions:
1. Which of the Big Four Are You Focused On? Commercial or Residential; New Construction or Repair/Remodel?
You should be focused on one of the Big Four and only move into the next area when you have an acceptable market share.
If an opportunity arises that is outside your area of focus you should consider pursuing it – just don’t let it take your eye off your area of focus.
2. Are You Focused on Gaining New Customers or Growing Your Sales through Existing Customers?
If your area of focus is gaining new customers, you need to be willing to invest the time it will take to convert those customers. Most companies, for instance, find it hard to gain new customers because they have a weak sales message. When they don’t invest in customer research, they tend to create a message that is cobbled together from assumptions about what the customer wants instead of facts about what they really need.
The most effective way to grow your sales through existing customers is by helping them be more successful when they do more business with you. Too many building material companies simply look at sales from the standpoint of what’s in it for them when they should also be wondering what’s in it for the customer. You should always look for ways to give them a better reason to give you more business.
If you are the leader with this customer, you should support them in ways that help them grow their overall business, not just get them to buy more of your product.
If you are one of several manufacturers competing for this customer, you should act like you are their biggest supplier whether or not you are. You do this by helping them to grow the sales of your type of product, not just your specific brand.
If a customer is going to sell $100,000 of your type of product in a year, your goal should be to help them sell $110,000. It should not be to make your products a larger portion of the $100,000 – that only benefits you, not them.
The company that helps a customer grow their sales to $110,000 is the company that customer is going to be more loyal to and will see their share of business grow with no additional incentives.
That will help you grow your sales with current customers like distributors, dealers, and big boxes. But you can take similar approaches with architects, builders, and contractors. Find a way to help them be more successful and you have made yourself indispensable. That’s a lot more valuable than convincing them to put in a one-time larger order for your product.
3. What Are the Top Three Types of Buildings or Customers You Want to Pursue?
When you focus on just a few types of buildings, you set yourself apart from your competitors. If you sell commercial interior doors, hospitality is probably a great market for you. If you target the hospitality market with product development, sales methods and marketing messages all tailored specifically for them and their needs, you’ll become an expert on your customer’s business and stand apart from your more generic competitors.
That doesn’t mean you can’t continue selling commercial doors for other types of buildings. What it means is that you have an area of focus that makes it easier for you to grow your sales in a particular market.
Here are some examples of how to focus on a market like this:
- Educate your sales and marketing people about the hospitality business and the role that doors play.
- Keep them up to date on the latest trends in hospitality and the challenges faced by owners, operators, architects, contractors and facilities managers.
- Join and participate in hospitality associations.
- Identify and build relationships with industry-leading architects, owners, and contractors.
- Develop and share helpful content like white papers, webinars, and lunch and learns focused on doors in the hospitality industry.
- Have a section of your website devoted to hospitality.
- Connect and communicate with people in the hospitality industry on social media.
- Develop a line of products specifically for the hospitality industry (these will usually be existing products with slight modifications that are then presented as products that have been designed specifically for the needs of the hospitality industry).
- Own it! If you’re focused on this market, there’s no reason you can’t claim to be “The Leader in Hospitality Doors”
Again, having an area focus doesn’t mean abandoning other opportunities. What you’re doing is simply taking steps to become recognized as the leader in a category, even if you’re not the largest manufacturer in it.
If you focus on just two or three building types, customers will seek you out and it will also be easier for your salespeople to get meetings. You will also see specifications increase and lose fewer of them.
4. What Are the Best Geographies or Local Markets for You Today?
The final area of focus is geography. It’s easiest to grow where you already have a strong presence. Most companies do not recognize the geographic areas where they have the best opportunities for growth, or they don’t adjust their focus accordingly. Usually, it’s because they’re, again, casting too wide a net: they see the market as North America with the main difference being the size of the city or the acceptance of their type of product in a geographic region.
Look more closely, however, and you’ll see that a few markets outperform the others. By focusing on these strong markets and giving them some extra or special attention, you will grow your sales faster.
Once again, I’ll stress that this is not about ignoring all other markets; it’s about recognizing that your strongest markets are your lowest hanging fruit for sales growth. Are your sales leaders spending more time in these markets? Can you provide some localized marketing support to help these markets grow even faster? If not, you’re wasting a great opportunity.
Get Everyone on The Same Team
Once you’ve decided what your areas of focus will be, make sure all of your employees understand this and are on the same page. Having a focus doesn’t do any good unless everyone is actively working with that focus in mind.
You might also want to share this with your customers. For example, you should be clear with your customer that you’re not just looking to grow your sales with them; you also want to help them be more successful.
Get Focused
Your approach to sales needs to be strategic. Every company’s sales and marketing resources are limited, and trying a dozen different tactics or trying to break into 20 or 30 different markets at once isn’t a smart use of them.
If you decide on a focus and don’t lose sight of it, you’ll get the most out of your sales and marketing efforts.
So, decide on the type of customer, building, and geographical location that you want to target and go at it with everything you’ve got. It’s your best bet for growing your sales and growing them quickly.
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